Settlement reached in federal case of misrepresentation involving military contracts

By Daily News staff

Published: Wednesday, April 9, 2014 at 03:55 PM.

WASHINGTON, D.C. -- A settlement has been reached in claims of misrepresentation by businesses involved in military construction contracts for projects at Camp Lejeune and Camp Pendleton in California.

Five California-based masonry subcontractors and two individuals paid nearly $1.9 million to resolve allegations that they violated the False Claims Act by misrepresenting their status as a disadvantaged small business in connection with the military construction contract, the U.S. Department of Justice announced Wednesday.

“This settlement demonstrates our continuing vigilance to ensure that those doing business with the military do so legally and honestly and that taxpayer funds are not misused,” said Assistant Attorney General for the Justice Department’s Civil Division Stuart F. Delery. “Among the rules that military contractors and subcontractors must follow are those relating to the use and hiring of small businesses.”

The case involved contracts to construct facilities at Camp Lejeune and Camp Pendleton.

Under the rules of the Small Business Administration, the contracts required that a certain percentage of the work be performed by disadvantaged small businesses. This contract requirement was intended to benefit small firms owned by women, minorities and other disadvantaged groups.

According to information from the Justice Department, the government alleged that the defendants and their principals misrepresented to the prime contractors that they were small businesses, and that these misrepresentations caused the prime contractors to falsely certify that they had complied with the small business provisions of the contracts in claiming payment.

“This settlement demonstrates our commitment to protect taxpayer money and the integrity of the system set up to build military bases for our nation’s military personnel,” said U.S. Attorney for the Eastern District of North Carolina Thomas G. Walker.

The settlement resolves allegations filed in two lawsuits by Rickey Howard, a former employee of Frazier Masonry Corp., in federal court in Raleigh. The lawsuits were filed under the whistleblower provisions of the False Claims Act, which permit private individuals to sue on behalf of the government for false claims and to share in any recovery.

The act also allows the government to intervene and take over the action, as it did in this case. Howard will receive $393,383.

The settlement was the result of a coordinated effort by the Civil Division of the Department of Justice, the U.S. Attorney’s Office for the Eastern District of North Carolina, the Defense Criminal Investigative Service, the Naval Criminal Investigative Service, the Navy’s Acquisition Integrity Office, the Naval Facilities Engineering Command (NAVFAC) and the Small Business Administration’s Office of Inspector General and Office of General Counsel.

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WASHINGTON, D.C. -- A settlement has been reached in claims of misrepresentation by businesses involved in military construction contracts for projects at Camp Lejeune and Camp Pendleton in California.

Five California-based masonry subcontractors and two individuals paid nearly $1.9 million to resolve allegations that they violated the False Claims Act by misrepresenting their status as a disadvantaged small business in connection with the military construction contract, the U.S. Department of Justice announced Wednesday.

“This settlement demonstrates our continuing vigilance to ensure that those doing business with the military do so legally and honestly and that taxpayer funds are not misused,” said Assistant Attorney General for the Justice Department’s Civil Division Stuart F. Delery. “Among the rules that military contractors and subcontractors must follow are those relating to the use and hiring of small businesses.”

The case involved contracts to construct facilities at Camp Lejeune and Camp Pendleton.

Under the rules of the Small Business Administration, the contracts required that a certain percentage of the work be performed by disadvantaged small businesses. This contract requirement was intended to benefit small firms owned by women, minorities and other disadvantaged groups.

According to information from the Justice Department, the government alleged that the defendants and their principals misrepresented to the prime contractors that they were small businesses, and that these misrepresentations caused the prime contractors to falsely certify that they had complied with the small business provisions of the contracts in claiming payment.

“This settlement demonstrates our commitment to protect taxpayer money and the integrity of the system set up to build military bases for our nation’s military personnel,” said U.S. Attorney for the Eastern District of North Carolina Thomas G. Walker.

The settlement resolves allegations filed in two lawsuits by Rickey Howard, a former employee of Frazier Masonry Corp., in federal court in Raleigh. The lawsuits were filed under the whistleblower provisions of the False Claims Act, which permit private individuals to sue on behalf of the government for false claims and to share in any recovery.

The act also allows the government to intervene and take over the action, as it did in this case. Howard will receive $393,383.

The settlement was the result of a coordinated effort by the Civil Division of the Department of Justice, the U.S. Attorney’s Office for the Eastern District of North Carolina, the Defense Criminal Investigative Service, the Naval Criminal Investigative Service, the Navy’s Acquisition Integrity Office, the Naval Facilities Engineering Command (NAVFAC) and the Small Business Administration’s Office of Inspector General and Office of General Counsel.